A Decade Later: 5 Lingering Effects of the Financial Crisis

It's now been about 10 years since Lehman Brothers filed for bankruptcy, which was the largest in U.S. history and is widely considered to be the start of the 2008 financial crisis and Great Recession.

Although a decade has passed, the financial crisis had a deep impact on millions of Americans. In fact, many Americans still behave differently with their finances and feel differently about certain things than they did before the crisis. Here are five lingering effects of the financial crisis as revealed in a recent NerdWallet survey.

Most Americans have changed their financial habits

According to the survey, nearly three-fourths of Americans say that they've changed their financial habits as a result of the financial crisis. Even 10 years later, 46% of Americans say they're more cautious about spending, and 38% say that they avoid debt as much as possible as a direct result of the crisis.

To be clear, this is a good lasting effect of the financial crisis. In too many cases, spending habits and Americans' attitudes toward debt had become dangerously carefree in the years leading up to the crisis.

More than three-fourths of Americans have lingering financial worries

Seventy-six percent of Americans say that the financial crisis is responsible for financial worries they still have today. For example, about one-third of Americans say they worry more about their lack of an emergency fund. Experts generally suggest that Americans should try to build up six months' worth of expenses in a readily accessible place. Recent data indicates that about 41% of Americans couldn't come up with $400 without going into debt, so it's no wonder this is a common worry.

In addition to worrying about their emergency fund, many Americans say that they now worry more about their retirement savings (or lack thereof) as well as their credit card debt.

38% of Americans are more afraid of the stock market

There has always been a significant amount of people who are scared of stocks. Many older Americans saw their parents lose everything in the Crash of 1929, and more recently, many people lost money or knew someone who got burned investing in dot-com stocks in the late 1990s and early 2000s.

However, the financial crisis produced such a wide-reaching stock market plunge that it scared even more Americans away from stocks. At the market's March 2009 low point, the S&P 500 had shed more than 56% of its value.

Even so, it's important for all Americans to realize that a diverse portfolio of stocks remains the best way to create wealth over the long run. The stock market has historically delivered total returns of about 10% annually over periods of a few decades.

Still not convinced? Consider this: If you had invested $10,000 in an S&P 500 index fund on October 5, 2007, the market's peak before the financial crisis and arguably the worst possible time to invest in recent history, your investment would be worth more than $23,400 today (including reinvested dividends). In other words, not only would you have recovered all of your losses, but you would have more than doubled your original investment.

Half of Americans don't trust banks as much as they used to

Almost half of Americans (49%) surveyed say that they're less trusting of national banks than before the crisis. In some ways, this certainly makes sense. After all, as a whole, the banks were behaving badly and ended up needing a taxpayer-funded bailout.

On the other hand, while there's certainly the case to be made that banks can't be trusted to always do the right thing when it comes to risk management, there's no reason not to trust banks with your money in checking and savings accounts. FDIC insurance guarantees that up to $250,000 in deposits are safe per depositor, per bank.

Americans think about homebuying differently now

Here's the one that's not surprising. In fact, I was more surprised that only 62% of Americans say that their perception of buying a home has changed as a result of the financial crisis. After all, the mortgage industry now is practically unrecognizable in many ways compared to back then. I (thankfully) never took advantage of one, but I clearly remember being offered NINJA (no income, no job, no assets) loans on several occasions.

Specifically, many Americans say they do not trust mortgage lenders to act in their best interest, despite reforms such as the Truth in Lending Act, and many more don't trust real estate agents. And nearly one-third of Americans say that their definition of "home affordability" has changed as a result of the crisis.

The effects of the financial crisis: Some helpful and some harmful

The bottom line is that even a decade later, the financial crisis still affects Americans in several ways. Some of these are certainly good -- for example, I already mentioned how Americans as a whole needed to get a bit more conservative when it came to taking on debt.

However, some of the effects of the financial crisis could be doing the younger generations a disservice -- specifically the fear of the stock market. Too many millennials believe that cash is the best place for long-term savings, and this could rob them of hundreds of thousands of dollars throughout their lives.

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